To view the PDF file, sign up for a MySharenet subscription.

ALLIED ELECTRONICS CORPORATION LIMITED - Altron Nexus / City Of Tshwane Municipal Broadband Network Judgement

Release Date: 17/07/2019 08:07
Code(s): AEL     PDF:  
 
Wrap Text
Altron Nexus / City Of Tshwane Municipal Broadband Network Judgement

Allied Electronics Corporation Limited
(Registration number: 1947/024583/06)
(Incorporated in the Republic of South Africa)
Share code: AEL ISIN: ZAE000191342
(“Altron” or “the company”)

ALTRON NEXUS / CITY OF TSHWANE MUNICIPAL BROADBAND NETWORK
JUDGEMENT

The Board wishes to inform shareholders that judgement was handed down in the Gauteng
High Court in Pretoria relating to the application brought by the City of Tshwane (“CoT”) to
review and set aside the tender and award of the Altron Nexus / CoT Municipal Broadband
Network contract. The contract was awarded to a special purpose vehicle (“SPV”) in June
2015, in which Altron Nexus is involved as the primary network designer and architect,
supplier of broadband equipment and related services, as well as being a minority
shareholder of the SPV.

The matter relates to a dispute between the SPV and CoT over the latter’s allegations that
the tender award process was unlawful due to the internal processes and procedure at the
CoT not having been followed correctly. Subsequent to being awarded, the project was put
on hold by CoT, pending the outcome of the court case. The Court’s decision on 16 July
2019 was to set aside the awarding of the contract on the basis of internal processes not
having been followed by the CoT in the awarding of the tender; in the decision of the
Municipal Council to approve the terms and sign-off of the Build Operate and Transfer
(“BOT”) agreement entered into between CoT and the SPV; and the waiver by CoT of the
fulfilment of suspensive conditions precedent relating to the BOT agreement.

Altron Nexus has assessed the status of this matter and reasonably estimates the exposure
of the business to amount to between R40 million and R60 million. This takes into account
provisions taken against its claim against the SPV due to the uncertainties with regard to the
legal challenge brought by CoT and the options available, including repossession and
redeployment of equipment supplied to date.

Altron is in the process of studying the judgement and its legal rights and will engage with
the SPV, project funders and CoT and consider the next steps to take with regard to this
matter, at which point the company will provide shareholders with an updated disclosure.

Johannesburg
17 July 2019

Sponsor: Investec Bank Limited

Date: 17/07/2019 08:07:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story